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Autumn Budget: Bigger house building targets and £177m skills-boosting plan for schools proposed

Prime minister Theresa May and chancellor Philip Hammond. Picture: Andrew Yates/PA Wire

Prime minister Theresa May and chancellor Philip Hammond. Picture: Andrew Yates/PA Wire

Strong signals that the curtain could be brought down on the age of austerity are expected when Philip Hammond gives his Budget.

In his keynote statement on Wednesday the chancellor will promise to build “a Britain fit for the future” in an attempt to assuage fears over industrial productivity and the housing crisis.

But his room for manoeuvre has been restricted by figures which show state borrowing jumped to £8bn last month – adding to pressure from the Office for Budget Responsibility’s expected downgrade of productivity projections.

As part of an effort to improve the country’s skill base to boost productivity, Mr Hammond will set out a £177m plan to give schools and sixth forms extra funding for every additional student taking A-level maths or core maths qualifications.

A £42m fund will also support £1,000 of training for every teacher in selected schools in areas that have “fallen behind”.

The director of the Institute for Fiscal Studies, Paul Johnson, said Mr Hammond was caught “between a rock and a hard place” and may be forced to abandon his target of balancing the nation’s books by the middle of the next decade.

Meanwhile, Labour was demanding large-scale investment in infrastructure to boost “sluggish” manufacturing industry, along with new cash for the public services, a major house-building programme and a pause in the Government’s flagship Universal Credit welfare reform.

As he finalised preparations for his second Budget statement, Mr Hammond sought to damp down expectation of a full-blown turn away from the austerity agenda which has dominated economic policy for seven years, insisting his package would be “balanced”.

But addressing MPs in the House of Commons, he will leave no doubt that increased investment is at the heart of his programme.

“In this Budget, we express our resolve to look forwards, to embrace change, to meet our challenges head on, and to seize the opportunities for Britain,” he is expected to say.

“Because for the first time in decades, Britain is genuinely at the forefront of a technological revolution, not just in our universities and research institutes, but this time in the commercial development labs of our great companies and on the factory floors and business parks across the land.

“So we must invest to secure a bright future for Britain, and at this Budget that is what we choose to do.”

Mr Johnson told the Economia website the best route for the Chancellor would probably be to “do very little and leave himself some room for manoeuvre later on”, but he was coming under intense political pressure not to do so.

“One the one hand, he is under pressure to cut spending to hit his fiscal targets, on the other he is under pressure to increase spending,” said the IFS director.

The Budget is expected to include proposals to increase house-building to 300,000 a year and to help young people buy their own homes, with intense speculation that stamp duty could be cut.

Motorists are fearful of a hike in diesel duty to support air quality, and measures are expected to assist millennials with the cost of rail travel and end overcharging on student loans.

The Child Poverty Action Group called on Mr Hammond to use the Budget to “rescue” Universal Credit by reversing cuts in its funding which have left it an average £420 a year less generous for working families than the benefits it replaces.

And the Association of Directors of Adult Social Services urged him to put more funds into a system which they said was close to “breaching its tipping point”, despite a £2bn injection of cash in the spring.

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